The Wi-Fi-only tablet has 8GB of storage, with a 1GHz dual-core Texas Instruments' OMAP (Open Multipmedia Application Processor), while the display is backlit LCD with a resolution of 1024 x 600. The Fire has a 7-inch multitouch LCD display and weighs 14.6 ounces.

It has apps for Amazon storefronts, including its Android app store, MP3, video and cloud services. Unlike iPad 2 and other competitors, the Fire does not have a camera or microphone, but its price and Amazon's proven content will undoubtedly make it a serious threat to steal market share. It comes with free cloud storage for data back up.

Kindle Fire joins a crowded tablet market dominated by Apple's iPad, which is projected to have a 73.4 percent market share by the end of the year, according to research firm Gartner. Gartner expects worldwide tablet sales of 63.6 million units this year, a 261.4 percent increase from the previous year. Tablet sales should reach 326.3 million units by 2015, Gartner said.

Amazon's tablet could become the "only credible iPad competitor in the market," said Sarah Rotman Epps, senior analyst at Forrester Research in a blog entry last month. Amazon's Kindle e-readers and online store already are popular, and Amazon will use its entertainment offerings and cloud infrastructure to boost the tablet's appeal.

Amazon offers 100,000 movies and TV shows through its instant streaming service via deals with CBS, NBC Universal, Sony, and Warner Bros. On Monday, Amazon and Fox forged a deal to deliver TV shows and movies through Amazon's streaming service. Amazon offers 950,000 e-books that can be instantly downloaded or read through the Kindle Cloud service. Amazon also offers the Cloud Drive service, in which users get 5GB free to store music, videos, photos or documents, and the Cloud Player music streaming service.

The iPad has an attractive user interface and cohesive set of software, entertainment and services, which has given it an edge over rivals such as tablets based on Google's Android OS. Adoption problems have dogged Android tablets because of high prices and lack of software and services. But Amazon could sell 3 million [M] to 5 million [M] tablets by the end of the year, given the price of the Kindle Fire, Epps said, before the price was publicly known. She said then that if Amazon priced its tablet under $300 (£192) it could reach those numbers.

Amazon CEO Jeff Bezos also debuted the Kindle Touch e-reader at the event. The Touch will cost $99 (£63). It also will come in a 3G-capable version. Both will ship on Nov. 21.

A basic Kindle is priced at $79 (£50) as of Wednesday, Bezos also announced. Amazon has not yet responded to Macworld's request for information on UK availability and pricing. There is also no indication whether the price drop for the basic Kindle, which currently costs £111, will apply in the UK.